How to Calculate the Value of an IRA

An IRA is the most popular form of private retirement investment for a few reasons. People know they cannot support themselves on Social Security alone; IRA's offer tremendous tax advantages and major growth. From time to time, it is important to be able to figure out how your IRA is doing in case you need to make adjustments.

Instructions

Difficulty: Moderately Challenging

1. Figure out what type of IRA you have. There are major differences between a Roth and a traditional IRA. Most have to do with taxes and contribution limits. Make sure you know which one you have and if it is the right fit for you (see Resources below).
2. Evaluate your financial goals. Decide what is important to you. It may be a house, a fancy car or large vacations. There are, however, very few reasons why you should borrow against your IRA. Buying a house may be the only good reason.
3. Find an IRA calculator online. There are two links to IRA online calculators in the Resources section below. Spend some time playing with these calculator and it will give you a good idea pf how much or how little you need to save for your retirement.
4. Determine what factors will influence what type of IRA you should get. Things such as your age, the age when you started investing, how much you invest, how long you invest, whether your company matches, what age you plan to retire at and how much money you want to retire with are just some of the factors you are going to have to measure to determine what IRA is good for you. You will also need some of these numbers to help compute the current value of an existing IRA.
5. Get a professional opinion from a certified financial adviser to determine the value of your IRA if you're having a hard time figuring it out on your own.

Tips & Warnings

• An easy rule of thumb is the money in an IRA doubles every 7.2 years.